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Y o u r s o u r c e f o r p r o f e s s i o n a l l i a b i l i t y e d u c a t i o n a n d n e t w o r k i n g .
Growing Insurance Issues with the Rise of Medical and Recreational
Marijuana
October 29, 2015
Sponsored by PLUS Diamond Sponsors:
P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
The information and opinions expressed by our panelists today are their own, and do not necessarily represent the views of their employers or of PLUS. The contents of these materials may not be relied upon as legal advice.
A copy of the presentation slides will be available following this webinar, on the PLUS website at: www.plusweb.org
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
Panel Members:
• Deb Goldberg, RPLU, Managing Director, Markel
• Michael McGrory, Partner, SmithAmundsen LLC
• Mark Passerini, President, Illinois Cannabis Industry Association
• Tim Pietrucha, Account Executive, Arthur J. Gallagher
• Jason Taylor, Attorney, Traub Lieberman Straus & Shrewsberry LLP
Moderator:
• Christopher J. Nadeau, Associate, Traub Lieberman Straus & Shrewsberry LLP
Meet The Presenters
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
COLE MEMO PRIORITIES
• Distribution to Minors
• Criminal Enterprises
• Interstate Transfer
• Pretext for Other Illegal Activity
• Violence/Firearms
• Drugged Driving
• Use of Public Land
• Possession on Federal Property
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
FEDERAL PROHIBITION ISSUES
• Interstate Commerce
• Intellectual Property
• Prescriptions
• Insurance
• Lawyers
• Taxes
• Banking
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
MEDICAL MARIJUANA SYSTEM
• Cultivation Dispensary Patient
• Ancillary Businesses to Assist
• Physicians
• Caregivers
• Regulation/Enforcement by Agencies
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
REGULATORY THEMES
• Patient Access—funds, experience
• Transparency—complete disclosure
• Security—record-keeping, alarms, cameras, delivery procedures, background
• Safety—location, packaging, recall, lab testing, infusion, inspections
• Economic—taxes, jobs
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
WHAT THE FUTURE HOLDS
• Extension/Expansion Act?
• New Conditions
• Justice System (Evidence, DUI, Violations)
• Discrimination and Employment
• Banking, Insurance, Etc.
• ???
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
Medical Marijuana Liability – the Legal Climate
• Legalized marijuana for medicinal use is a relatively new concept:o California was the first state to legalize Medical Marijuana in 1996o It is currently legal in some form in 25 states and legal for recreational
use in 4 states and the District of Columbiao Medical Marijuana is projected to grow to a $15 billion per year
industry by 2019o Marijuana remains a Schedule I drug under federal law
• Case law clarifying statutory rights and duties is sparse
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
Conflict Between State and Federal Law
• Informs the discussion on liabilities surrounding the manufacture, distribution and possession of Medical Marijuana
• Federal position: Marijuana is a Schedule I drug – it has no acceptable medical use but it is an inefficient use of federal resources to prosecute Medical Marijuana related crimes when the action is in compliance with state law
• State’s Medical Marijuana laws differ but common elements include:o Available only for enumerated conditions
o Marijuana access must be pre-approved by a licensed physician
o Dispensaries are strictly licensed by the state
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
Medical Marijuana and Professional Liability
• Dispensary Risks:o Dispensing risko Failure to validate Medical Marijuana cardo Interstate Commerce considerations
• Physician Risks:o Failure to properly evaluate a patient for Medical
Marijuana useo Telemedicine risks/compliance with Medical Board
regulations
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
Medical Marijuana and General Liability
• Premises Security Consideration: o Dispensaries and growers operate as all cash businesseso Increasingly have armed guards on premises
• Products Liability Exposures:o Dispensaries that grow their own producto Growing market for edibles
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
Medical Marijuana and EPLI Risk
• The next big question in Medical Marijuana liability exposure: Can an employer terminate an employee for testing positive for marijuana use if that employee properly obtains the drug for medicinal purposes?o State Law – Split between stateso Federal Drug Free Workforce Act
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
Medical Marijuana and Worker’s Compensation
• Is a Worker’s Compensation Carrier required to cover Medical Marijuana as a treatment for a disability or injury?o There is no clear trend in the case lawo Proponents argue: 1) It is a safer and effective treatment
for pain; 2) A physician authorization makes it a reasonable and necessary treatment option
o Opponents argue: 1) It is illegal at the federal level; 2) It is not an FDA approved treatment option; 3) There is no proof of efficacy beyond anecdotal evidence; 4) There are no evidence-based guidelines for use; 5) It has a negative impact on performance
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
Illinois Pilot Program
• Bonding• Research• Ancillary business• Racketeer Influenced and Corrupt Organizations Act
(RICO Act)• Opportunity• What to Expect• Big changes in Canada
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
• Controlled Substances Act, 21 U.S.C. § 801 et seq. (the “CSA”)
• Gonzales v. Raich, 545 U.S. 1 (2005) (Supremacy Clause requires that where state and federal law conflict, federal law prevails)
Initial Coverage Considerations
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
Worker’s Compensation Insurance
• Vialpando v. Ben’s Auto. Servs., 2014 NMCA-084 (N.M. Ct. App. 2014) &
• Lewis v. Am. Gen. Media, 2015 N.M. App. LEXIS 74 (N.M. Ct. App. June 26, 2015)
Question: Whether employer and worker’s comp. insurer must reimburse injured worker for medical marijuana expenses pursuant to lawful use under Medical Marijuana Statute
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
Vialpando; Lewis, cont’d.
Argument: Conflict with Federal Law - would be illegal to reimburse worker for medical marijuana which is illegal under Federal law.
o DOJ Memos: Medical Marijuana not among priorities;o Beyond 8 priorities, DOJ “generally defer to State and local
authorities.” Vialpando;o Consolidation and Further Appropriations Act (2014) – no funds to
prevent implementation of MM laws.
Ruling:Violation of Federal law and public policy is “speculative” in light of “equivocal” DOJ & federal public policy. Clear public policy of State expressed in statute. Insurer must reimburse medical marijuana expenses.
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
Employment Practices Liability
• Brandon Coats v. Dish Network, LLC, 350 P.3d 849 (Colo. 2015)o Medical marijuana use unlawful under federal law;
o Employees who engage in medical marijuana use under
Colorado’s Medical Marijuana Statute are not protected from
wrongful discharge under “Lawful Activities Statute.”
• Casias v. Wal-Mart Stores, Inc., 695 F.3d 428 (6th Cir. 2012)o Statutory construction. Private employers not required to
accommodate use of MM in workplace.19
P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
• No obligation to accommodate Medical Marijuana under company drug policies;
• Importance of clear Drug-Policy; increased risk of lawsuit from non-MM employees?
• Medical Marijuana in Workplace:o Liability Insurance Issues – injury to others
o Worker’s Compensation Issues – intoxication or impairment
• Coats potential conflict with Lewis/Vialpando?
Coats/Wal-Mart Discussion
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
Questions
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P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
Panelist Contact Information
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Panelists:
• Deb Goldberg, RPLU, Managing Director, Markel [email protected]
• Michael McGrory, Partner, SmithAmundsen LLC [email protected]
• Mark Passerini, President, Illinois Cannabis Industry Association [email protected]
• Tim Pietrucha, Account Executive, Arthur J. Gallagher [email protected]
• Jason Taylor, Attorney, Traub Lieberman Straus & Shrewsberry LLP [email protected]
Moderator: • Christopher J. Nadeau, Associate, Traub Lieberman Straus & Shrewsberry
P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
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Thank You Diamond Sponsors
P r o f e s s i o n a l L i a b i l i t y U n d e r w r i t i n g S o c i e t y
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Thank you for your time.
A replay of this webinar will be available to PLUS Members at: www.plusweb.org
